Tuesday, July 10, 2007

The blogosphere and the news media (especially the grump at ZDnet) are up in arms over Sprint's decision to fire cranky clients. Seth has a post about it. Apparently, many of the 1000 fired called 25 times a month. You can't please those customers... ever! And at $30 per call -- they were costing Sprint $750 per month each - or $750,000 per month combined. Sometimes it's better to get rid of the unprofitable customers.

In the book, The 4 Hour Work Week, Tim Ferris talks about Parkinson's law and how applying the Pareto Principle to your business can increase revenue. (Get mp3 here). Pareto says that 80% of your complaints and your revenue will come from 20% of your customers - but not the same 20%. Identify your best clients - and duplicate them, find more of them. That's the way to success.